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What's Wrong with Modern Macroeconomics? Why its Critics have Missed the Point -super-1

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  • M.R. Wickens

Abstract

The blame for the recent financial crisis has been attributed to modern macroeconomic theory rather than banking and finance. This article defends modern macroeconomics against its critics arguing that the critics have missed the point of why macroeconomics is carried out in the way it is. It also defends finance from some criticisms, especially of the efficient markets hypothesis. It is claimed that, far from being in a state of crisis as a result of recent events, modern macroeconomics has received a huge stimulus, and that the financial crisis was brought about more by a failure to employ modern macroeconomics than by the failings of macroeconomics. (JEL code: E00) Copyright The Author 2010. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • M.R. Wickens, 2010. "What's Wrong with Modern Macroeconomics? Why its Critics have Missed the Point -super-1," CESifo Economic Studies, CESifo Group, vol. 56(4), pages 536-553, December.
    • Handle: RePEc:oup:cesifo:v:56:y:2010:i:4:p:536-553
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifq015
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    Citations

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    Cited by:

    1. Turnovsky, Stephen J., 2011. "On the role of small models in macrodynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1605-1613, September.
    2. Jaakko Kuorikoski & Aki Lehtinen, 2018. "Model selection in macroeconomics: DSGE and ad hocness," Journal of Economic Methodology, Taylor & Francis Journals, vol. 25(3), pages 252-264, July.
    3. Wickens, Michael R., 2014. "How did we get to where we are now? Reflections on 50 years of macroeconomic and financial econometrics," CEPR Discussion Papers 10197, C.E.P.R. Discussion Papers.
    4. Michael Wickens, 2015. "How Did We Get to Where We Are Now? Reflections on 50 Years of Macroeconomic and Financial Econometrics," Manchester School, University of Manchester, vol. 83, pages 60-82, December.
    5. Marek Lubiński, 2013. "Międzybankowy rynek pieniężny i zarażenie," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 19-41.
    6. Senbeta, Sisay, 2011. "How applicable are the new keynesian DSGE models to a typical low-income economy?," MPRA Paper 30931, University Library of Munich, Germany.
    7. Franz R. Hahn, 2013. "Grundlagen der Geldpolitik vor, während und nach der Finanzmarktkrise," WIFO Monatsberichte (monthly reports), WIFO, vol. 86(12), pages 961-975, December.

    More about this item

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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